Welfare claimants will have to “work for the dole” by cooking meals for the
elderly, picking up litter and cleaning up graffiti, George Osborne will
announce.

Tens of thousands of long-term jobless welfare claimants will have to work for 30 hours a week doing community service or lose their unemployment benefits, the Chancellor will say.

The announcement, at the Conservative Party conference, is the latest toughening of the Coalition’s welfare rules, a key part of the party’s pitch to voters at the next general election.

The Chancellor will also use his conference speech to sound an optimistic note about the economy, but warn that the Coalition’s “battle to turn around Britain” is “not even close to being over”.

Despite coming under pressure from Ed Miliband’s pledge of a cap on energy prices, Mr Osborne will not announce specific help on the cost of living, insisting that a stable economic recovery is the only way to improve household finances.

Chancellor of the Exchequer George Osborne

The Tories have dedicated their conference to “hardworking people” and will use the meeting in Manchester to highlight Coalition policies, which they say will reward work.

The new Help to Work scheme will be put in place next year and could see as many as 60,000 long-term unemployed people doing Community Work Placements. Other claimants will have to visit Jobcentres every day to find work, or attend mandatory training and therapy sessions to deal with problems like poor literacy or drink and drug addiction.

The rules will mean that it is no longer possible simply to claim Jobseeker’s Allowance without doing anything to earn it, Mr Osborne will say.

“No one will be ignored or left without help. But no one will get something for nothing,” Mr Osborne will tell the conference. “Help to work – and in return work for the dole.”

He will add: “For the first time, all long-term unemployed people … who are capable of work will be required to do something in return for their benefits to help them find work.”

The new rules will apply to around 200,000 long-term Jobseeker’s Allowance claimants a year, who have failed to find employment after completing the Coalition’s Work Programme.

They will then be given an “end of term report” assessing why they have not found work and assigning them to one of three compulsory programmes. Ministers estimate that around a third of those would end up on the Mandatory Intensive Regime to address underlying problems including illiteracy, alcoholism or mental health troubles.

Another third will be expected to visit a Jobcentre every day, signing an attendance register in the morning then spending the day working on job applications.

The remaining third would go on to Community Work Placements, spending 30 hours a week doing community work organised by Jobcentre staff or local charities.

Claimants who fail to attend any of the compulsory programmes will face an accelerated sanctions regime with fewer appeals. The first breach of the rules will mean a loss of four weeks’ benefit and the second will forfeit three months’ money.

However, the total number following each of the three routes is expected to be significantly lower than 200,000.

Ministers say that many claimants, faced with a tougher new regime, will simply choose to stop claiming benefits.

One source predicted a large reduction in the total number of claims for Jobseeker’s Allowance when the new scheme starts next spring.

“A lot of these people are actually working on the black economy, and as we make the rules tougher, we know that many of them will just drop out of the system because it is no longer worth their while trying to claim,” the source said.

The new welfare rules, devised by Iain Duncan Smith, the Work and Pensions Secretary, will cost around £300 million to implement — money Mr Osborne will find from Whitehall departments’ budgets.

The fact that Mr Osborne is unveiling Mr Duncan Smith’s policy reflects a thaw in relations between the two men.

A book published this week discloses that in the early months of the Coalition, Mr Osborne told friends he believed Mr Duncan Smith was “not clever enough” to oversee the complex welfare system.

The Coalition has been in office since May 2010, but Mr Osborne will argue that the number of long-term benefits claimants is Labour’s fault.

The last government left office with almost 5 million people on out-of-work benefits, something Mr Osborne will describe as “a waste of life and talent” that the Coalition is addressing.

Cabinet ministers privately admit that Labour’s eye-catching pledge on energy prices has put them on the defensive over living standards, but Mr Osborne will not respond with a similar offer. Instead, he will insist that only the Coalition’s plan to reduce the deficit by 2018 will reduce the strain on household finances squeezed by inflation.

He will add: “Our economic plan is the only plan for living standards. In fact, if you don’t have a credible economic plan, you simply don’t have a living standards plan.”